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n 1. an allowance or deduction made from a gross sum.
v 2. to reduce the amount of a professional fee.
References in periodicals archive ?
In the benchmark scenario, we also assume that the utility function is logarithmic and additively separable, and the distribution of discount factors is uniform.
For example, in the case where the discount factor is set to 0.
Again, we find that the only way to rationalize the hedged and unhedged payoffs is to characterize the peso event as one that involves moderate losses but a high value of the stochastic discount factor.
Thus, as [alpha] decreases, the critical discount factor [[delta].
Table 3 Sharpe Ratio and Moments of the Stochastic Discount Factor in the Egalitarian Economy Aggregate State Sharpe Ratio Corr(m, [R.
It is possible to reinterpret the above stochastic discount factor with IES = 1 and atemporal risk aversion [gamma] > 1 in terms of a representative consumer who has IES and risk aversion both equal to 1, but where now [gamma] > 1 measures his doubts about the stochastic specification of his model for consumption growth and cash flows.
This resulted in a problem similar to a constrained MDP with possibly unequal discount factors, which was solved heuristically by introducing a weight parameter [xi] for risk and value.
One can arrive at an IRR by trial and error, ie by changing the discount factor until it produces a net present value of nil.
Figure 4, panel F shows that the discount factors increase sharply throughout the year.
Forget the Discount Factor, It's All About Arbitrage
I now state the equity premium puzzle using the stochastic discount factor (SDF) paradigm.